1. Technical Field
This invention relates generally to a system and method for extending credit, and more specifically to a system and method for extending a location-based offer of credit to a prospective borrower upon determining the prospective borrower's location.
2. Background Art
Consumers employ credit to purchase goods and services all over the world. The use of credit has many advantages. By way of example, a US citizen traveling to Canada may use the same credit card in either country without having to physically exchange US dollars for Canadian dollars, and vice versa. Additionally, consumers may carry a single credit card rather than large amounts cash. When credit cards are lost, the consumer simply has lost card cancelled and replaced with a new card. When cash is lost, however, it is generally gone forever.
Traditional credit systems work as follows: a consumer requests a credit line from a lender. The consumer then completes extensive paperwork for the lender. This paperwork includes personal information, such as name, address, and tax identification information. The paperwork may also include financial information, such as bank account information, prior borrowing information, and employment information. The lender then analyzes this and other data to determine whether a consumer is credit worthy. Where this is the case, the consumer receives a predetermined credit amount, such as $10,000. The consumer may then spend this money as needed, perhaps by check or credit card.
The problem with the conventional system is twofold: First, the consumer must apply for this credit in advance. The consumer must submit the requisite paperwork to the lender. The approval process takes a period of several days to several weeks. As such, the consumer must apply for credit long before actual needs for goods and services arise.
Second, the consumer in conventional systems is generally given general lines of credit far in excess of need. For instance, if the consumer wants a credit card for traveling, the consumer may only require $1000 to $2000 for any one trip. However, the lender may issue the consumer a card for $10,000 or $20,000. This excess of need is problematic for two reasons. First, if the spending mechanism—the credit card or check book—is lost, fraudulent charges may be excessive, thereby increasing the overall cost of credit. Next, if a consumer needs different types of credit, for example a first line for travel and a second line for home renovations, a second lender may be reluctant to lend when a first, large credit line is already in place.
There is thus a need for an improved credit offering system and method that does not require advance approval and is more in line with the consumer's actual needs.
Skilled artisans will appreciate that elements in the figures are illustrated for simplicity and clarity and have not necessarily been drawn to scale. For example, the dimensions of some of the elements in the figures may be exaggerated relative to other elements to help to improve understanding of embodiments of the present invention.